ON Semi buys 30% share in Fujitsu wafer fab

ON Semiconductor will purchase a 30% incremental share of Fujitsu Semiconductor’s 8-inch wafer fab in Aizu-Wakamatsu, resulting in 40% ownership when the purchase is completed.

The transaction is expected to be completed on the first of April next year – that is after certain regulatory approvals and other closing conditions have been received.

The two companies entered into an agreement in 2014, under which ON Semi obtained a 10% ownership interest in the Aizu 8-inch fab. Initial transfers began in 2014, and successful production and ramp-up of wafers began in June 2015. ON Semi has since continued to increase demand at the Aizu 8-inch fab, and both companies determined that further strategic partnership will maximise the value both companies provide, a press release reads.

The plan for On Semi now is to increase ownership to 60% by the second half of 2018 and move forward to complete ownership in the first half of 2020, allowing the company to add capacity to their global footprint. This additional capacity will allow the company to continue scaling its business based on demand and enable increased supply chain flexibility.

“We believe that transforming into a globally competitive company is the key for the continuous growth of the Aizu 8-inch fab. Furthering our strategic partnership with ON Semiconductor, who provides a broad product portfolio, will enable the Aizu 8-inch fab to secure future growth,” said Kagemasa Magaribuchi, president of Fujitsu Semiconductor Limited. “We believe that the growth of the Aizu 8-inch fab will contribute to maintaining and expanding a strong workforce and assist with the development of the regions.”

“We have had a strong and successful partnership with Fujitsu since announcing our investment in 2014,” said Keith Jackson, president and CEO of ON Semiconductor. “We believe furthering our partnership with Fujitsu Semiconductor will enable us to maintain our industry-leading manufacturing cost structure and also help us optimize our capital spending in coming years. This is a strategic investment for ON Semiconductor to secure additional manufacturing capacity, in support of our accelerated production needs and for revenue growth in coming years.”